JUDGMENT OF 4. 4. 1968 — CASE 13/67 BECHER v HAUPTZOLLAMT MÜNCHEN

In Case 13/67 Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht (Finance Court), Munich, for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A.M. Donner and W. Strauß (Rapporteur), Presidents of Chambers, A. Trabucchi and J. Mertens de Wilmars, Judges, Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts

1. Origins of the case

2. Wording of the questions referred; arguments of the Finanzgericht

A — On 26 April 1967 the Finanzgericht, Munich, decided to refer the following questions to the Court for a preliminary ruling:

B — The Finanzgericht sets out certain considerations which may be summarized as follows:

On Question I

On Question II

II — Procedure

III — Summary of the observations submitted by the interested parties

1. Question I

2. Question II

3. Question III

Grounds of judgment

Substance

Costs

I —. Summary of the facts

1. Origins of the case

2. Wording of the questions referred; arguments of the Finanzgericht

A —. On 26 April 1967 the Finanzgericht, Munich, decided to refer the following questions to the Court for a preliminary ruling:

I —. Does the first paragraph of Article 97 of the EEC Treaty produce direct effects and create individual rights which national courts must protect or, if an average rate does not conform to the principles laid down in Article 95 of that Treaty, does the only remedy lie in the right of the Commission to address appropriate directives or decisions to the State concerned in accordance with the second paragraph of Article 97?

II —. How is the expression average rates appearing in Article 97 of the EEC Treaty to be interpreted, and in particular :

III —. What is to be understood by internal taxation imposed indirectly on similar domestic products? Does this also include the turnover tax, or, where applicable, the transportation tax on auxiliary materials, packaging materials, working materials and the means of production used to manufacture and deliver similar products, and transport effected by third parties?.

B —. The Finanzgericht sets out certain considerations which may be summarized as follows:

II —. Procedure

III —. Summary of the observations submitted by the interested parties

1. Question I

(a). This provision cannot have such an effect because it does not lay down a clear and unconditional obligation, as is provided for by the jugment in Case 57/65:

(b). The correctness of these considerations is proved by the fact that Article 97 provides special arrangements derogating from Article 169 for the procedure which the Commission must employ if the Member States infringe the Treaty. The reason is that the assessments and estimates necessary for the application of Article 97 require Community supervision; the authors of the Treaty wished to avoid the use of the power of appraisal being directly called in question before the Court of Justice.

(c). It is impossible to raise against this view the objection that it gives different results in each Member States. As the legal provisions of the various Member States are dissimilar, it is inevitable that certain provisions of the Treaty will only be applied in certain States. Since all the Member States are to introduce the value added tax prior to 1 January 1970, the problems raised by Article 97 are merely transitional.

(d). Community law contains a series of provisions which are addressed exclusively to the States, which are obliged to transform them into provisions addressed directly to individuals. These principally concern matters which encroach upon the national legal systems. These legal systems constitute separate orders within which all legislative provisions are to a certain extent interdependent; this is why the Member States were left free to insert the Community rules harmoniously into their own legal systems.

(e). Article 97 is an independent provision, addressed to the Member States which levy a turnover tax calculated on a cumulative multi-stage tax system, and thereby governs cases in which it is impossible to make an actual comparison of the taxes. Although it refers to Article 95, this is merely to avoid repetition. The fact that one provision refers to another does not ipso facto imply that it is subordinate to it. Moreover, this reference is only to the principles set out in Article 95.

2. Question II

(a). Only the rates which were fixed on the basis of a comparison made in concreto with the turnover tax on domestic products constitute genuine average rates. It follows from this that the expression does not cover, for example, the rates established by a Member State before the entry into force of the Treaty, by exact alignment on the level of the rates imposed on domestic products at the stage corresponding to that of the imports. In cases of this type Article 97 is not applicable. Nevertheless in practice the rates so fixed generally represent only a minimum charge and they consequently conform to Article 95. The truth of this argument emerges from the following considerations.

(b). A rate calculated on the basis of an estimate can only be an average rate if the estimate is restricted to a minimum average charge which can be justified by valid reasons.

(c). As regards point (c) of Question II, the Commission shares the doubts of the Finanzgericht and states as follows: if one were allowed to allocate products bearing extremely different charges to a same group of products this would leave the field open to operations whereby Articles 95 and 97 could easily be evaded. A group of products should only be formed on condition that it includes only products on which approximately equivalent charges are imposed. Nevertheless this interpretation itself does not prevent the continued existence of numerous factors making for uncertainty and this leaves a wide area of discretion to the Member States.

3. Question III

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the Federal Republic of Germany, the Commission of the European Communities and the plaintiff in the main action; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the EEC, especially Articles 95, 97 and 177; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; Having regard to the judgment delivered by the Court on 3 April 1968 in Case 28/67; THE COURT in answer to the questions referred to it by the Finanzgericht, Munich, by order of that court of 26 April 1967, refers to the interpretation given in its judgment in Case 28/67, namely:

1 On the first question:

2 On the second question:

3 On the third question: